October 17, 2010

Endogenous Growth, Asymmetric Trade and Resource Taxation

by Lucas Bretschger and Simone Valente

- Since 1980, the aggregate income of oil-exporting countries relative to that of oil-poor countries has been remarkably constant despite structural gaps in productivity growth rates. This stylized fact is analyzed in a two-country model where resource-poor (Home) and resource-rich (Foreign) economies display productivity differences but stable income shares due to terms-of-trade dynamics.

Bretschger, L. and S. Valente (2010). "Endogenous Growth, Asymmetric Trade and Resource Taxation." CER-ETH, Center of Economic Research, ETH Z├╝rich, Economics Working Paper Series, Working Paper No. 10/132, Aug 2010.